Russia considers new energy tariffs as Chinese miners relocate

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The Russian Energy Ministry is looking to introduce special electricity tariffs to crypto miners after the industry migrated to the country from neighboring China.

Russian Energy Minister Nikolai Shulginov announced Wednesday that the authority is working on a new framework to differentiate tariffs between public use and cryptocurrency mining, local news agency RBC reported on October 13.

Shulginov said that crypto miners in Russia should not consume electricity at residential tariffs, saying:

We cannot allow miners to take advantage of the situation at the expense of our low residential electricity tariff […] In order to maintain the reliability and quality of the power supply, we believe it is necessary to prevent miners from consuming electricity at residential tariffs.”

Some Russian regions have reportedly faced massive energy consumption growth, with Chinese miners allegedly leaving the country amid a nationwide crackdown on cryptocurrency.

Russia’s Irkutsk region, located about 1,700 kilometers from China, saw its energy consumption rates exceed last year by about 160%. The governor of Irkutsk, Igor Kopsev, noted an “avalanche-like growth” of energy consumption in the jurisdiction, and blamed illegal crypto-mining activity exacerbated by the exodus of miners from China.

One of the largest regions of Siberia, Irkutsk is rich in energy resources, hosting many large hydroelectric power stations in cities such as Irkutsk, Ust-Ilimsk and Bratsk. The area is home to some cryptocurrency mining data centers by BitRiver, the country’s largest mining locator service provider.

Related: Data center operators have no problem with Russia’s new encryption campaign

BitRiver founder and CEO Igor Runets told Cointelegraph that the company fully supports the latest initiative by the Department of Energy:

It is fair and economically sound. Moreover, it will help miners enter the legal field, so that the state can take the first step towards regulating the industry, which will eventually lead to the transparency of the entire industry.”

Ronts said the company pays for its data center electricity at business customer rates, paying “2.5 or 3 times more than individuals.”

Russia has become one of the best locations for Bitcoin (BTC) mining activity after the surrender of the Chinese miner. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin miners in Russia account for 11% of the total distribution of the global BTC mining hash rate, outperforming only Kazakhstan and the United States.